Shell selects Louisiana site for potential $12.5bn GTL plant

HOUSTON (ICIS)--Shell has selected a site in Louisiana for a potential gas-to-liquids (GTL) plant that could cost $12.5bn (€9.3bn) and create 740 direct jobs, the chemicals major announced on Tuesday.

The 2,400-acre (972-ha) site is located in Ascension Parish near Sorrento, Louisiana, a Shell spokesperson said.

The first of its kind in the US, Shell’s Gulf Coast GTL will use natural gas to produce cleaner-burning transportation fuels, such as natural gas-based diesel and jet fuels, Shell and Louisiana Governor Bobby Jindal said in a joint release. It will also produce other products, such as specialty waxes and building blocks for lubricants, plastics and detergents.

The Shell spokesperson emphasised that it is “very early” in the process and that it will be “several years” before the company makes a final decision on moving forward with the project.

“Selecting a site is an important step that allows us to conduct more detailed planning, technical analysis and begin the permitting process,” said Jorge Silva, executive vice president at Shell Upstream Americas. “Should we move forward with the project, we expect project costs to be well in excess of the minimum spend that was agreed upon with the State of Louisiana.”

The state offered Shell an incentive package that includes a performance-based grant of $112m to reimburse costs associated with public road improvements, land acquisition and other infrastructure costs.

The Louisiana Department of Transportation and Development will begin moving forward this year with road improvement projects, which are targeted for completion in the fall of 2016.

Shell estimated that the GLT project would create up to 10,000 construction jobs, and an economic impact analysis indicated it would result in about 3,900 new indirect jobs.

Shell built its first commercial GTL facility in Malaysia in 1993.

Its Pearl GTL facility in Qatar is a joint venture with Qatar Petroleum that began production in 2011. The facility processes 1.6 billion cubic feet/day of natural gas to produce 140,000 bbl/day of GTL products and 120,000 bbl/day of natural gas liquids (NGL) and ethane.